MLM is a Respectable Profession

Do you believe that network marketing, or MLM is a respected profession?

If you’re already involved in multi-level marketing, do you sometimes feel too embarrassed to admit it? We can look at the history of MLM in order to shed some light on the perception of this often-misunderstood profession.

Direct selling was the beginning.

The expressions MLM (multi-level marketing) and network marketing will be used interchangeably during this article. As a way of product distribution it has been around as far back as we can trace recorded history. In fact, as early as 2000 BC, the Babylonian “peddler” was protected in the Code of Hammurabi, a monument of Babylonian law and the first set of written laws that we know of. For the protection of the peddler, compensation was assured for the seller of goods.


In North America direct selling began in the 1600’s with fur trading routes on behalf of the Hudson Bay Company. By the 1700’s, in New England, the “Yankee Peddler” traveled the countryside either by foot, carrying tin trunks with leather straps, or cart selling items such as pins, needles, small hardware, perfume and combs.


During the 1800's the idea evolved into the door-to-door salesman. The first were companies such as the Watkins Company and the California Perfume Company, which is now known as Avon.

The term "network marketing" was coined during the World War Era.

1934 saw the beginning of the oldest known network marketing company with the founding of the California Vitamin Company. Realizing that many of their new recruits were friends and family of their existing sales force, they designed a sales compensation model encouraging their salespeople to invite new representatives from happy customers. The company then rewarded the representative for the sales of their entire group-or network; thus the profession was born. Today, the California Vitamin Company is called Amway.

The birth of the “Pyramid Scheme” or “Ponzi Scheme”

Soon others were trying to make a buck with a similar concept; they looked like network marketing companies but the difference was the only purpose was recruiting others into the program. In these counterfeit versions the only thing changing hands was money; there were no goods or services. These became known as Pyramid or Ponzi Schemes.

In 1975 the US Federal Trade Commission (FTC) claimed that Amway and its structure was an illegal pyramid. However, in 1979 it was determined that Amway was a legitimate business opportunity, as opposed to a pyramid scheme. Because of that case we now have the Amway Safeguard Rule, a series of three questions, with which any multi-level marketing business can be measured.

Multi-level Marketing today

In the 1990’s and into the 21st century many reputable business people began to endorse the industry. People such as Robert Kiyosaki, Jim Rohn, Warren Buffet, and Paul Zane Pilzer began to encourage people to consider multi-level marketing as a wonderful home based business vehicle for the average person.


Paul Zane Pilzer, Nobel prize winning economist and advisor to Presidents, goes so far as to predict that over 10 million new millionaires will be created through network marketing over the next 10 years.


According to Pilzer, “Home-based businesses are one of the fastest-growing segments in our economy, and that trend will only continue, as the age of the corporation, which began barely a century ago, now gives way to the age of the entrepreneur.”


Following this brief history of MLM, do you feel a bit differently about the profession? Online marketing and recruiting can be much more efficient when you believe in what you’re doing and have solid answers for questions along the way.